Operator’s selection is no lottery

Today, we hear that only two groups have submitted bids to become the next operators of the UK’s National Lottery: the incumbent, Camelot; and Indian lottery operator Sugal & Damani.

The new entrant promises to raise a greater amount money for good causes with a more efficient operation than Camelot. Of course, we don’t know much about other aspects of their bid. But if everything else were roughly equal, surely a lottery that raises more for charity would be preferable? This is not a new idea. In the previous races to become the lottery operator, the People’s Lottery, Richard Branson’s proposed not-for-profit organisation, made a strong showing, but always lost out to Camelot.

This is the third time the licence has been up for grabs since the lottery’s inception in 1995. In 2000–01, the competition descended into farce when the National Lottery Commission effectively awarded the licence to the People’s Lottery, only to have the decision overturned in the High Court by Camelot, who went on to have their licence extended instead. This was despite the new Labour government having promised in their manifesto that the lottery would be run by a non-profit organisation.

Sadly, even Richard Branson sees little point in trying a third time. As Simon Burridge, who ran the People’s Lottery’s bid last time around, puts it:

The playing field’s so uneven it’s become pointless, putting in all that time and effort and money. I think the process has lost credibility. Richard’s always up for a fight, so it really has to be pretty bleak.

With each licence renewal, it seems Camelot gain an ever increasing advantage over any possible competitors, making it impossible for anyone else to catch up with them and become a serious rival. The bidding process makes it far easier for the incumbent to continue. The lottery operator has a monopoly, and while not quite a licence to print money, it’s the next best thing. What could be done? Perhaps the government could insist the lottery was non-profit-making. But haven’t we heard that idea somewhere before?

I wish the new Indian bidders well, but I’m afraid I know who my money would be on for winning the new lottery licence. It’s said that the lottery produces winners every week, and it seems that they will continue to be Camelot’s shareholders.

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